Upside surprise how? Your reaction?
Yeah, well, I think it's much better than what
the market was expecting, especially in industrial production number and also
the retail sales number. But if you look at in December, the
capacity utilization rate for the steel furnace sector suiting up as it is seems
to be quite a bit of activity going on. I saw industrial production is beating
us in terms of expectation and retail sales is a bit of a puzzle.
I mean, to be honest, in December, is it OK?
That's the thing. You know, that's the point here.
While I think in December, they pretty much remove all the restrictions.
Right. So that's only one month rule.
I mean, that's way we look at is just takes months.
I think then people stayed in because of the fear of getting Covid on top of
things. That's right.
So that's why it's puzzling. But I believe that the market will
welcome such a number. What does it tell you about growth next
year then? Do you think that, you know, that 5
percent is is pretty tangible at this point?
Well, if it's keep going this way. Yeah.
So then if it keeps beating expectations in such such a huge way, then yeah it's
possible. But otherwise, you know, I would say
that, you know, 3 percent this year and then 3 percent for 2023 is quite
possible. You look at this GDP bounce though, two
point nine percent. We will look at one point six percent.
Okay. Now that tells us about, of course and
informs us as to what happened for the full year and GDP for the full year was
3 percent as opposed to two point seven, which was let's run it.
That's right. I think 4, 4, 20, 22.
Then I think 2 percent. Most people would think that is a
reasonable number they can live with. I think going forward to next year.
Right. So if we don't see a recovery in the
property sector in also next year, net export is not going to help us.
So and then the property sector takes more time to recover, then it will it
will affect consumption as well. So next year, it's actually going to be
more challenging than this year to feel a jobless rate that's actually lower at
5.5. I know these numbers don't really show
what the real picture of what's going on.
But are we seeing really people going back to work enough to really kind of
boost consumption in the next year? I mean, what are you seeing on the
ground when you've been trialled? Exactly.
It really depends on how many people were looking for jobs.
Yeah. So that's how the economists calculate
jobless numbers, which can be a little bit crucially sick of the 24 year old
jobless rate is sixteen point seven percent.
And this is only which has been highlighted by the authorities.
There is a deep concern. That's right.
I think in the middle of last year, it was 20 percent as high as 20 percent.
So now is actually improving as well. But I think for 2022, if you look at the
total evidence or the stories that's going on, you know, either uni
graduates, you know, funny or very difficult to find jobs, people are going
for, you know, some very sort of less than meaningful jobs, then they should
be there then they're supposed to be. Then I think, you know, took from 20
percent youth jobless rate to now 16 percent is somehow the proof and then on
the margin as well on the market. Yeah.
I'm just wondering, when it comes to those excess savings, everyone's talking
about that, right, that they piled up. It's almost at records.
And you know, how how they're gonna spend it is the key question.
Do you think that that's really going to go into consumption or do you think
people are just being a bit more cautious about, you know, keeping us
savings in the bank? I think if you look at what happened in
2022. So in this one year, the increase in
savings is more than the previous three years combined.
So this is just huge. And if you look at the PBS, the survey
is saying that people has more inclination to save and less inclined to
spend. And therefore, you know, unless the
outlook improves substantially, it's hard for me to imagine how people go out
and just spend it all. Okay.
And we're getting to get a portent of the future here as well with the first
population decline for the country here since the early 1960s.
Right. You know, this on top of that over count
that they've already admitted to. I mean, this is the demographic
challenge that China is facing, is it's not that we are going to see a declining
population. And not only that, an aging population
on top, especially this year when people have not been having children for
obvious reasons, given the lockdowns. How do they deal with this?
To be honest, most countries are facing similar challenges.
So I think in terms of this way, I think South Korea is poverty d worst the
lowest in the world. And I think China is not far behind.
I think at the at the moment, the best rate is about one point one.
So I think that South Korea is about one night, I think, going forward, because
demographic is a sort of a secular long term trend.
It's very difficult to reverse it. So even though I saw for.
A couple of years ago, you know, we promote this to child policy, but ever
since then, both reactive decline and marriage rate in 2010 to actually
decline substantially as well for obvious reason.
So I think, you know, it is a very difficult challenges to deal with.
Yes, that's a structural problems. Wondering, you know, in terms of this
year, the external picture is not looking too good either.
You know, when it comes to manufacturing and the demand for that, are the
problems going to be more external than next year and this year for China year,
then the domestic. That's right.
If you look at the exports to the US and also to Europe.
Right. So year on year ISE in 4 4 last month is
down 20 percent year on year. So it's a very substantial decline.
I think, you know, the Fed's policies really trying to temper, you know, with
the U.S. demand and the trend to suppress it so
that you can lower the inflation rate. So in so doing, then it creates less
demand for Chinese goods as well going into October.
You know, the effect is already very obvious.
And also, if you look at the PPA, the deflation in BPO, which is the upstream
sector, is already worse than expected. So therefore, I think, you know, going
forward in 2023 this year, NIKKEI. But it's not going to help us in terms
of growth. I'm just wondering in terms of just
overall looking at data now, I mean, this used to be really all important.
Is it that important now to even look at these sort of headline numbers versus
high frequency data mobility? Like, you know, like how much how much
do you actually spend time looking at this data versus like high frequency
data? Yeah, to be honest, I don't really look
at this official data anymore. Firstly, it lacks credibility.
Right. So it's just any any any number they
want to put on. And I think, secondly, high frequency
data give you a picture of what is changing on the margin.
So that gives you more sense in terms of where the market is going.
OK. So if you're an investor, what are you
going to be looking at? What are your takeaways from these
numbers in particular this today? So, yes.
No. Well, I think, you know, on on paper is
better than expected. And given that we don't have we don't
have better source of information available, therefore, we know we choose
to believe, especially now, the market is on positive momentum.
So it actually makes people feel good or justified.
You know how you know how far this rally has come.